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Cablegate: Argentina: Opportunity Seized to Advocate Again for Atsc

VZCZCXYZ0000
OO RUEHWEB

DE RUEHBU #1576/01 3241519
ZNR UUUUU ZZH
O 191519Z NOV 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2493
INFO RUCPDOC/USDOC WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUCNMER/MERCOSUR COLLECTIVE
RUEHKO/AMEMBASSY TOKYO 0867
RUEHUL/AMEMBASSY SEOUL 0164
RUEHBS/USEU BRUSSELS

UNCLAS BUENOS AIRES 001576

SIPDIS

EEB/CIP FOR AMBASSADOR DAVID GROSS, ANNE JILLSON
DEPARTMENT FOR FCC
USDOC FOR 4322/ITA/MAC/OLAC/PEACHER

E.O. 12958: N/A
TAGS: ECON EINV PREL ECPS ITU OVIP TSPL TINT AR
SUBJECT: Argentina: Opportunity Seized to Advocate Again for ATSC
Digital TV Standard

Reftel: (A) Buenos Aires 1279
(B) Buenos Aires 1358

1. (SBU) SUMMARY. Embassy Buenos Aires leveraged a recent visit to
Argentina of Robert Graves, President of the Advanced Television
Systems Committee (ATSC), to arrange visits with senior media and
GOA officials, furthering advocacy for the ATSC DTV standard. An
updated and enhanced ATSC offer was delivered to the GOA, including
a new offer to digitize state-owned Channel 7, and Graves reiterated
longstanding ATSC offers of a manufacturing plant, patent discounts,
training, and technology transfer. Graves, Emboffs, and ATSC
industry reps met with senior executives from Argentina's dominant
media company the Clarin Group, senior executives of Channel 7, the
Director of the Federal Broadcasting Service, and the GOA
Communications Secretary. Embassy also assisted Graves to transmit
the full offer in writing to GOA Planning Minister de Vido. While
ATSC has budget constraints that limit its ability to push its
standard, Post has ensured that appropriate GOA decision makers were
made aware of the ATSC standard's strong economic offer that
supplement its already robust technical advantages. With the timing
of a GOA decision on a choice of standard is still unknown, Post
continues to encourage industry (ATSC and its member companies)
action focused on its economic offer, in what could be a golden
opportunity to influence the GOA's decision on its future DTV
standard. END SUMMARY.

-------------------------------------
Leveraging ATSC visit to Buenos Aires
-------------------------------------

2. (SBU) Robert Graves, President of the Advanced Television Systems
Committee (ATSC), visited Buenos Aires October 28-29, primarily to
attend the Argentine Chamber of Broadcaster Providers and
Manufacturers (CAPER) convention (and where Emboffs attended the
presentations given by representatives advocating the Japanese,
European, and ATSC standards). Embassy, in light of recent
indications that the GOA could be nearing a decision on a DTV
standard (refs A and B), arranged for Graves to visit with senior
media and GOA officials who will play a role in any decision
(details below). (In drafting our Embassy press released on the
ATSC visit to Argentina, Graves reminded Post and industry reps that
we should not call this the "U.S. standard," but rather an
"international standard.")

3. (SBU) Post had briefed Graves in September of Argentine media
conglomerate Clarin's suggestion to consider adding to its GOA offer
a pledge to digitize state-owned Channel 7, one of Argentina's
top-rated open-air television stations (ref A), and emphasized the
need to make the offer attractive politically, not merely advocating
its technical merits. Graves and ATSC member companies subsequently
crafted such an enhanced offer, which was included in his briefings
with industry and GOA officials. In these meetings, Graves
reiterated that ATSC's original, 2006 proposal still stood, with the
additional offer to digitalize Channel 7. The other main aspects of
the offer include an investment in a Argentine manufacturing plant
for LG Plasma and LCD TV sets (which could create 500 jobs), a 75%
discount on patents, the creation of an R&D fund in Argentina
supplied by patent revenues, a transfer of technology from patent
holders exclusively to Argentina, and financing options for the
transition from analog to digital for broadcasters.

-------------
Clarin Group
-------------

4. (SBU) ATSC's Robert Graves, LG Electronics/President of Zenith
R&D Lab Dr. Jong Kim, Embassy's Senior Commercial Officer (SCO), and
Press Attache met with two senior executives from Argentina's
dominant media company, the Clarin Group, Vice President Jose Aranda
and IT & Telecommunications Corporate Manager Juan Kedzierski.
Aranda had been the first to suggest to the Embassy the idea of
digitizing state-owned Channel 7 as part of an updated ATSC offer
(ref B). Participants discussed how this idea was incorporated into
the ATSC Forum's latest proposal to the GOA, which would involve
Korea-based LG paying for the digitalization equipment by tapping
into the R&D funds that are part of the original offer. Once the
ATSC standard has been chosen, and the 75% of the royalties
generated from the ATSC patents are flowing into the R&D fund, LG
will be reimbursed for its Channel 7 digitalization. LG has told
EmbOffs that it is also interested in converting a station outside
of Buenos Aires in the same manner.


5. (SBU) Participants also discussed breakthroughs in the ATSC
mobile standard. Previously, ATSC's mobile capabilities were
considered a weak point in the standard, and are an issue used by
competitors of the ATSC standard. Graves told Clarin and Emboffs
that mobile multi-casting is built into the latest ATSC standard's
version, something the Japanese standard does not have.

6. (SBU) Clarin representatives asked Graves and Emboffs that they
not be credited for the idea of digitizing Channel 7, as its ongoing
disputes with the GOA could endanger the proposal being accepted.
They stressed the need to explain the price advantages of the ATSC
equipment to the consumers and the GOA (for example, Japanese
standard TVs are 50% higher than ATSC TVs), and that Japanese
standard TVs would most likely have to be imported from Brazil, as
opposed to being made in Argentina in line with the LG offer.
Clarin, Graves and Emboffs agreed that these economic and political
factors would be more important to GOA decision makers than any
technical features the ATSC standard has (lower energy consumption
and wider coverage, greater bandwidth efficiency, for example).

---------------------
State-owned Channel 7
---------------------

7. (SBU) Graves and FCS SCO then met with Channel 7 executives
Tristan Bauer, President, National System for Public Media, Mateo
Gomez Ortega, Administrative Coordinator, and Antonio Gennaro, from
the Agennaro Media Technology company. Graves and Channel 7
executives zeroed in on the technical aspects of the ATSC standard,
as well as ATSC's offer to digitalize Channel 7. In addition to the
digitalization offer, Graves stressed ATSC's offer to work with
Argentine universities on digital TV services development, training
courses, and channel planning, which would be provided free of
charge and using software developed by the FCC. Channel 7
representatives openly expressed interest in the proposal, and had
many follow-on questions.

------------------------------------
Head of Federal Broadcasting Service
------------------------------------

8. (SBU) Graves then met with Mr. Gabriel Mariotto, head of COMFER,
GOA's Federal Broadcasting Service (FCC equivalent). Present at the
meeting was Dr. Jong Kim, LG Electronics/President of Zenith R&D
Lab, ATSC Forum representative Juan Carlos Guidobono, Dolby
consultant Carlos Klachquin, FCS SCO, FCS Commercial Officer,
EconOff, and the Embassy of South Korea press attache Seung chul
Yeo. Graves and Guidobono together briefed Mariotto about the
updated ATSC offer. On several occasions during the meeting,
Mariotto expressed his great interest and support for the "solid,
fully integrated, and serious" offer. Mariotto said that he and a
member of his staff had recently gone to Japan to visit GOJ
officials and industry leaders. Ironically, he noted that industry
leaders frankly admitted that they did not have any strong
preference for which standard Argentina chooses, as they were ready
to provide equipment for any standard. (Emboffs were later told by a
local industry source that Mariotto came back from Japan
disappointed that he did not have the hoped-for offers for
investment from GOJ officials or industry).

9. (SBU) Mariotto also mentioned that Japan-based NEC
representatives have indicated that they have plans to test a
digital transmitter at state-owned TV Channel 7. Mariotto did say
that Brazil's decision to go with the Japanese standard would "have
some weight" with Argentina, but that other economic and technical
issues would also come into play. Mariotto indicated that a
decision would be made before the end of this year. Afterwards,
Mariotto's chief of staff called FCS commercial specialist to inform
us that Mariotto was enthusiastic about the meeting and ATSC.

------------------------------
Communications Secretary Salas
------------------------------

10. (SBU) Graves then met with GOA Communications Secretary Lisandro
Salas, a regular Embassy interlocutor and who reports directly to
powerful GOA Planning Minister Julio De Vido. Also present was ATSC
Forum representative Juan Carlos Guidobono, Dr. Jong Kim, LG
Electronics/President of Zenith R&D Lab, Dolby consultant Carlos
Klachquin, FCS SCO, FCS Commercial Officer, and EconOff. Graves and

Guidobono went over the offer with Salas. Salas indicated that he
had just returned from a trip and would need time to fully review
the package, but expressed his interest and gratitude for the
information. Salas indicated that he could not estimate when a
decision would be made, but that it would be made at the "highest
levels" of government, maybe by the president herself.

---------------------------------------------
Follow through with Planning Minister De Vido
---------------------------------------------

11. (SBU) After being unsuccessful in scheduling a meeting with
Planning Minister De Vido, Graves sent the full ATSC offer and
background presentation to De Vido, in recognition of the fact that
he will play a major role in any decision. The written offer was
transmitted by the Embassy with an endorsement cover letter from the
Charge d'Affaires.

-------
Comment
-------

12. (SBU) Post is satisfied that we took advantage of ATSC Forum
President Robert Graves's visit to Argentina, and that ATSC was able
to incorporate our suggestions to enhance their offer on how to best
approach the GOA. And while we remain confident that the ATSC has
the best standard from the technical standpoint, it is important
that ATSC made senior GOA officials aware of the standard's strong
economic (and political) advantages. While it is still anyone's
guess when the GOA will choose a DTV standard, we also note that GOA
decisions are sometimes sudden and unexpected. At least for the
time being, we feel assured that key decision makers have the latest
information on the U.S. competitor.

WAYNE

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